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Delmia Pushes Its Digital Manufacturing Software Beyond Automobiles

When I was in elementary school, we played kickball during recess. There weren’t any umpires, so we had to police ourselves. If there was an intractable dispute, we would yell “Do Over!” and simply repeated the play. No harm, no foul.

However, things are little more complicated–and expensive– in the adult world. For manufacturers of big ticket items like cars and airplanes, a do-over means production delays, angry customers, and millions of dollars in losses.

That’s where Delmia, a unit of European software giant Dassault Systemes, comes in. The company, based in Auburn Hills, MI, is one of the world’s biggest players in digital manufacturing–the use of sophisticated 3D software that simulates the working of manufacturing plant before it goes into operation. Delmia’s customer list is literally a global Who’s Who, including Toyota, Nissan, Boeing, Airbus, the U.S. Defense Department, and NASA.

With digital manufacturing, companies essentially perform a virtual dry run on a planned production facility, allowing engineers to figure out where to best position workers, equipment, supplies and tools and in what order. The goal is to maximize efficiency and reduce potential errors that lead to defective products. To prevent accidents and workplace injuries, the software can also factor in detailed demographic information on workers, including gender, height, weight, and languages.

“The virtual factory runs in concert with the real factory,” says Delmia vice president Patrick Michel. “It focuses on the ‘what if?’ scenarios. Starting with a product, how are we going to build and engineer the manufacturing process?”

“The manufacturing point of view is different from the engineering view,” he continues. We’re looking to find patterns that are not obvious. It’s amazing the stuff you find that you hadn’t anticipated.”

The stakes are pretty high, Michel says. Boosting production time by 10 to 20 percent can mean three extra cars a year, he says. On the flip side, any delay can cost a company $1 million to $5 million a day. Just ask Boeing about the pain it has felt from manufacturing delays for its next-generation composite material airplane, the 787.

“Manufacturing productivity must be ever increased and producers must constantly look for ways to meet the faster, better, cheaper mantra of today’s economy,” according to a report by CIMdata, a research firm in Ann Arbor, MI. “To meet these pressures and remain competitive, leading manufacturers are going digital.”

In the report, CIMdata estimates that a company that annually invests $5 million to $10 million in digital manufacturing can save it $50 million to $100 million a year.

Nevertheless, demand for such software dipped in 2009 as manufacturers struggled to cope with the global economic downturn. But “there are signs that business is starting to pick up,” Michel says.

Delmia wants to be prepared for an upswing, especially by expanding beyond its core automobile and aerospace customers and into more highly regulated products like vaccines, drugs, and medical devices. Digital manufacturing can help those customers meet regulatory requirements set by the Food and Drug Administration, Michel says.

In March, Dassault paid $36.5 million to acquire Intercim, based in St. Paul, MN, a manufacturing software maker that specializes in life sciences. Last month, Dassault purchased Enginuity, which makes research and development software for regulated formula-based industries like cosmetics, pharmaceuticals, and specialty chemicals.

Delmia is also courting energy customers, including nuclear power plants.

The $500 million or so digital manufacturing industry is highly fragmented, with Delmia and Siemens accounting for 20 percent of the market. But Michel made clear that Dassault is not buying companies simply to boost sales.

“We don’t do it for market share,” Michel says. “We’re interested in strategic value. We’re always looking for one plus one equals three.”